When you raise the price of something, the demand for it goes down right? Not always. There are a few important exceptions to this rule that you should know about. In fact, sometimes raising the price can actually increase your sales volume.Have you ever gone looking for something you don’t know a lot about? Things like a computer, a portable music player, or an appliance. You know what they do, but you know deep inside that you couldn’t spot a good one from a bad one on your own. What do you do? Well I tend to go out and find a range of products with a range of prices. Even if I’m looking for something basic I usually don’t buy the one that’s the cheapest. Why? Because I wonder what’s wrong with it that they can sell it cheaper than all the other kinds.There’s a perception that the lowest price equals the lowest quality, and we don’t want to get stuck with the worst product or service available. So what do we do? We buy something in the middle of the price range because it makes us feel more secure. The fact is there may be nothing wrong with the least expensive alternative except that it’s priced wrong.Here's a business management tip for you. If you are the lowest cost provider in your market, try bumping your prices up above your least expensive competition and see what happens. In some cases you will see increased sales volume just because you are no longer perceived as the lowest quality solution. In most cases you need to maintain a good price, but the lowest price is not always the best.So somewhere in the middle is often a good pricing strategy, but there is one category in which the highest prices actually attract customers. This exception to the normal supply demand dynamic is luxury items. There are certain items that people buy for the prestige. Things like a luxury car or a yacht fall into this category. So do some types of stereo equipment or vacations. People buy them because they are expensive, not in spite of the fact they are expensive.In the case of luxury items a price drop can actually reduce demand. What's the point of owning a BMW if everyone can afford one? BMW are high quality cars, no doubt about it, but they are also attractive because not everyone can afford one. When you drive up in one, people say "wow, is that what you drive? You must be doing very well". We like that.In the case of high end luxury items you need to remember that you are selling to people's egos, not to the logical side of their brains. A major part of the attraction is having something that not everyone can have. That's part of what makes it special. The more affordable it is the less prestige goes along with owning it.So the next time you have the urge to lower your prices to undercut the competition think carefully about whether or not that's really the right thing to do. In some cases lowering the price can drive people away from your products and services instead of attracting them to you.
by: Daryl Cowie
Showing posts with label selling and marketing. Show all posts
Showing posts with label selling and marketing. Show all posts
7/14/08
Dropped Jaw Syndrome, Your Fastest, Most Reliable Market Test
Business owners should be more like doctors. Forget selling and start asking your customers where they hurt. Broken leg? Ulcer? Empty wallet?
Don't sell, diagnose!. And what are you as a doctor looking for?
Well, of course: that ever-illusive, yet ever- profitable disease called Dropped Jaw Syndrome. OK, it may not be in any medical book. But Dropped Jaw Syndrome, however rare, is known to anyone who ever tried to sell something.
The customer walks into your store, listens to your pitch and falls into an awestruck trance. "I'll take three of them.”Joking aside, the dropped jaws, or at least its symptoms, are the fuel behind every sale. When a customer is persuaded to buy, their reaction isn’t logical. You’re connected with the part of their brain that decides if you and your product are believable, the limbic system.
Sure, you still need to persuade with facts, but logic is a distant second to their desire to buy, their reflexive dropping jaw. Diagnosing Dropped Jaw, the key is finding the dropped jaw, tracking the symptoms back to their source. But it’s there. And it’s quite easy to find once you stop thinking about your product for a moment and focus on the customer. . . I mean, patient.
Don’t believe me? Well, put on a white coat, hang a stethoscope around your neck and do some market tests of your own. But this is a test you have to do face to face. Forget the demographic studies, sales plans and benchmark reports, and get in front of a customer. Now, take his temperature, make your pitch. And follow it through the customer’s reaction. Did his jaw drop? Hmm. You must have done something wrong.
Try again, but listen like a doctor searching for a heart murmur. Ask a question, offer information, and then hear the subtleties of his response. And when you’re diagnosing a customer, instead of trying to sell your product, something changes. You become more attuned to the subtle dropped jaw and related body language. And you ask more accurate questions. You notice which of the claims and benefits penetrate the customer? Protective indifference, sparking real interest.
Of course, most salespeople already do this to a degree, but it must be done intentionally, consciously. The true advantage of Dropped Jaw Syndrome comes from changing your role for a moment, from selling and telling to assessing what customers want, even when they can’t say it in words. Demand that you live up to their desires.
Because if you’re not dropping jaws, you’re in danger of falling behind the competition.
Worse, you’re probably overlooking your company uniqueness. Diagnosing Your Pitch In searching for dropped-jaw reactions, some companies have made unbelievable claims central to their promotions. We’re all seen the TV commercial where "Crazy Joe" says he’s so insane he’s practically giving away the furniture in his store.
Better are claims that are striking and stand out from the competition, but don’t Over-promise. Consider "Have it your way" (Burger King) or "It takes a licking and keeps on ticking" (Timex). In establishing your own unique proposition, the dropped jaw test is quick and reliable. Customers, whether they know it or not, are very good at distinguishing between businesses they trust and those they don’t. Let them tell you how you’re doing.
Building Customer Confidence discovered the Dropped Jaw Syndrome years ago. It started with my claim that I can assess the health of a business by looking only at its business card. And when I would point out the subtle messages on their cards, most of them unintended, people? Jaws would drop. The value of the dropped jaw test is the perspective it imparts.
By listening to the customer or putting yourself in her shoes, you’re more likely to notice the "small potatoes" signals you’re sending. Such telltale signs aren’t based on the business size or age. But once you recognize them they can be easily repaired. As you play doctor, it’s your job to notice what hurts the customer and cure it. When you find ways to make your customers jaws drop, you’ll take their pain away. And that will make your business a healthy one.
Reference: Dr. Lynella Grant article, expert on the signals that make up the body language of a business.
Author of The Business Card Book and Stop Looking Like Small Potatoes.
www. giantpotatoes. com
Don't sell, diagnose!. And what are you as a doctor looking for?
Well, of course: that ever-illusive, yet ever- profitable disease called Dropped Jaw Syndrome. OK, it may not be in any medical book. But Dropped Jaw Syndrome, however rare, is known to anyone who ever tried to sell something.
The customer walks into your store, listens to your pitch and falls into an awestruck trance. "I'll take three of them.”Joking aside, the dropped jaws, or at least its symptoms, are the fuel behind every sale. When a customer is persuaded to buy, their reaction isn’t logical. You’re connected with the part of their brain that decides if you and your product are believable, the limbic system.
Sure, you still need to persuade with facts, but logic is a distant second to their desire to buy, their reflexive dropping jaw. Diagnosing Dropped Jaw, the key is finding the dropped jaw, tracking the symptoms back to their source. But it’s there. And it’s quite easy to find once you stop thinking about your product for a moment and focus on the customer. . . I mean, patient.
Don’t believe me? Well, put on a white coat, hang a stethoscope around your neck and do some market tests of your own. But this is a test you have to do face to face. Forget the demographic studies, sales plans and benchmark reports, and get in front of a customer. Now, take his temperature, make your pitch. And follow it through the customer’s reaction. Did his jaw drop? Hmm. You must have done something wrong.
Try again, but listen like a doctor searching for a heart murmur. Ask a question, offer information, and then hear the subtleties of his response. And when you’re diagnosing a customer, instead of trying to sell your product, something changes. You become more attuned to the subtle dropped jaw and related body language. And you ask more accurate questions. You notice which of the claims and benefits penetrate the customer? Protective indifference, sparking real interest.
Of course, most salespeople already do this to a degree, but it must be done intentionally, consciously. The true advantage of Dropped Jaw Syndrome comes from changing your role for a moment, from selling and telling to assessing what customers want, even when they can’t say it in words. Demand that you live up to their desires.
Because if you’re not dropping jaws, you’re in danger of falling behind the competition.
Worse, you’re probably overlooking your company uniqueness. Diagnosing Your Pitch In searching for dropped-jaw reactions, some companies have made unbelievable claims central to their promotions. We’re all seen the TV commercial where "Crazy Joe" says he’s so insane he’s practically giving away the furniture in his store.
Better are claims that are striking and stand out from the competition, but don’t Over-promise. Consider "Have it your way" (Burger King) or "It takes a licking and keeps on ticking" (Timex). In establishing your own unique proposition, the dropped jaw test is quick and reliable. Customers, whether they know it or not, are very good at distinguishing between businesses they trust and those they don’t. Let them tell you how you’re doing.
Building Customer Confidence discovered the Dropped Jaw Syndrome years ago. It started with my claim that I can assess the health of a business by looking only at its business card. And when I would point out the subtle messages on their cards, most of them unintended, people? Jaws would drop. The value of the dropped jaw test is the perspective it imparts.
By listening to the customer or putting yourself in her shoes, you’re more likely to notice the "small potatoes" signals you’re sending. Such telltale signs aren’t based on the business size or age. But once you recognize them they can be easily repaired. As you play doctor, it’s your job to notice what hurts the customer and cure it. When you find ways to make your customers jaws drop, you’ll take their pain away. And that will make your business a healthy one.
Reference: Dr. Lynella Grant article, expert on the signals that make up the body language of a business.
Author of The Business Card Book and Stop Looking Like Small Potatoes.
www. giantpotatoes. com
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